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Harlan couldn’t tell you much about retirement. He didn’t exactly retire in the traditional sense. But he could teach you a lot about self-reliance and determination – traits more older adults are putting into practice today.
He needed both when he started his business. After all, he was 65. But people loved what he was cooking up, so he kept going. Soon, he wasn’t just Harlan. He was Colonel Sanders, founder of Kentucky Fried Chicken.
It’s a familiar story now, and one that more people seem eager to follow.
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The title “Founder” on LinkedIn jumped by 69% in 2025 and is up 300% since 2022. Driven by layoffs and economic uncertainty, many professionals are rebranding freelance or consulting work as entrepreneurship.
And while it may seem like a younger person’s game, it’s increasingly common among older adults.
Workers in their 50s and beyond often face challenges finding or keeping traditional jobs, but they’re also living longer, wanting to stay engaged and, in many cases, needing additional income. These older entrepreneurs share many of the same motivations as younger ones: autonomy, flexibility and meaningful work.
Research indicates that about 30% of Americans in their 70s, roughly 1.3 million people, are self-employed. And many are succeeding. According to a 2020 study, a 60-year-old who starts a new business is three times more likely to succeed than a 30-year-old.
“[A] 60-year-old who starts a new business is three times more likely to succeed than a 30-year-old.”
But, what happens when you stop? Does becoming a founder help or hurt your retirement?
Whether you’re doing it out of necessity or interest, before you change your LinkedIn title, it’s worth thinking about how your retirement plan may need to change along with it.
The cost of the founder title
Stepping out on your own can feel exciting, full of possibility. But it also means leaving certain things behind.
David Haas, CFP® and founder of Cereus Financial Advisors, established his RIA at age 55 and says the transition can work well if it’s intentional.
“I think it can work out great if it’s done for the right reasons and the founder has considered the option of working for someone else,” he says.
What can be overlooked are the trade-offs. You may lose employer-sponsored benefits, including a 401(k) match, health insurance and other forms of compensation. You’ll also be responsible for self-employment taxes and funding your retirement entirely on your own.
In other words, thinking about what you could lose is just as important as what you could gain.
As Natalie Pine, CFP® and managing partner at Briaud Financial Advisors, notes, “Potential mistakes of self-employment later in life typically involve spending money on a dream that drains resources and doesn’t amount to much.”
And the costs aren’t just financial. Many traditional jobs provide structure, community and mental stimulation — things that can be easy to overlook until they’re gone.
“Your new venture needs to address those needs intentionally,” Mitchell Kraus, CFP® and founder of Capital Intelligence Associates, says, “or you’ll find yourself working just as hard for half the income with none of the fulfillment.”
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“The financial mechanics of becoming a solopreneur later in life are actually very solvable.” — Mitchell Kraus
The good news is that self-employment comes with powerful retirement savings options, often with higher contribution limits than traditional plans.
“The financial mechanics of becoming a solopreneur later in life are actually very solvable,” says Kraus.
What works best depends on your income and the consistency of your cash flow. As Haas explains, “If the founder still has to save more for retirement, then it’s vital that they try to do so from the company’s cash flow. The best method will vary by company. The SEP IRA is simplest, and then the Solo 401(k). A defined benefit plan will require a consistent cash flow that few founders can immediately support.”
A self-employed 401(k), or Solo 401(k), functions much like a traditional employer plan, but allows you to contribute as both the employee and the employer. In 2026, total contributions can reach up to $72,000 for those under 50. Catch-up contributions add another $8,000 for those ages 50 to 59 and 64 or older, while those ages 60 to 63 can contribute up to $11,250 more if the plan allows.
For high earners, the difference can be meaningful.
“For those wildly successful,” Pine says, “we see tremendous potential to enhance retirement savings with the opportunity not only to maximize a defined contribution plan like a Solo 401(k) but a defined benefit plan in addition if they are self-employed. If they add employees, they can start a new comparability plan that can max [out] owner deferrals based on age while providing a modest retirement for other employees.”
Health insurance: The biggest wild card
If there’s one area that consistently catches new founders off guard, it’s the cost of health care. Haas describes it as “one of the biggest thorns.”
For those between 55 and 65, the challenge is the Medicare gap. Without employer coverage, many founders must rely on COBRA, a spouse’s plan or the ACA marketplace.
“I was on COBRA when I first started,” Haas says, “and then transitioned to a MEWA plan available in New Jersey. In many states, an option like this is unavailable, and you have to look to a spouse’s plan or the marketplace, often at very high cost.”
Pine adds that age plays a major role in planning. “Older founders are typically closer to Medicare age, so they need to make sure any plan they adopt accounts for that transition,” she says. “Most solopreneurs we work with either use an ACA plan or a spouse’s insurance until they turn 65.”
Is your business an asset — or just a job?
Another important question is how you view your business over time. Is it something you’re building to sell or simply a source of income?
In Haas’s experience, most fall into the latter category. “Very few of these companies can be later sold for anything above assets,” he says. Many are built around consulting or solo work, meaning the income stops when the founder stops working.
That makes it less of an asset and more of an income stream, something to factor into your broader retirement plan.
For those hoping to build a sellable business, more intentional planning is required, including how the business is structured.
Pine notes that this can have significant implications. “You need to be very thoughtful about entity structure,” she says, “as there are meaningful tax benefits if there is significant success down the line.”
The psychological trap of the founder identity
For some, the biggest challenge may not be financial, but psychological.
When you build something yourself, it can become part of your identity. That can make it harder to step away, leading to the familiar refrain: “Just one more year.”
At the same time, research shows that too much unstructured time doesn’t necessarily lead to greater happiness. Many people derive a sense of purpose from being productive and contributing. That tension can keep founders working longer than they originally planned.
Still, it’s that kind of passion that can make these ventures worthwhile in the first place.
As Pine puts it, “We would only encourage someone to start a business later in life who is passionate about what they are doing. They will have a longer runway that way and enjoy their time even if it isn’t fruitful.”
Chances are you’re not building the next KFC. But if your later years are about pursuing something meaningful, becoming a founder might not be such a wild idea after all.
Take it from the Colonel himself: “I just say the moral out of my life is don’t quit at age 65, maybe your boat hasn’t come in yet. Mine hadn’t.”
